Wednesday, June 29, 2011

Redefining the "Waste" in Waste, Fraud and Abuse

Politicians love to talk about getting rid of waste, fraud and abuse and pundits get all starry eyed when this term is mentioned but, in my view, most of what is mentioned is just fraud and abuse. A $1000 hammer is waste but more specifically it's really just abuse, maybe fraud.

Waste is anything that doesn't pass a cost-benefit analysis. If the "social" benefit isn't enough to justify the taxes collected and spent then that is waste. Or if a department or program continues to not be able to meet its goals and we continue to pay for it, that is waste.

For example, the Department of Education has been around forty years. That seems like plenty of time for it to justify its existence. Yet, every year we spend more and more without moving the needle on student achievement. That is waste. Eliminating waste would mean eliminating the Department of Education.

For some reason, liberal economists have a hard time with this concept. They believe if you just have the right people who perform the right tweaks, then it will work. But the evidence suggests otherwise. And experience suggests that the pendulum swings of politics will guarantee that who you think is the right person will not always be at the helm.

Instead, they should begin to follow the evidence. Apply the analysis. End those departments and programs that don't work and you won't have to make it your personal mission to educate people on the awesomeness of raising taxes through semantic magic.

New York Gay Marriage Net Loss for Freedom

A few quick thoughts in bullet format because it's more fun:

  • NOT a win for freedom. It's a win for equal rights under the law and against government sanction discrimination.
  • NY has just re-sanctioned and reinforced the idea that government should be the sole arbiter of marriage instead of private institutions.
  • Gay people have been placed into the privileged class of licensed married couples upon which the state of New York bestows 1,324 different benefits. The underclass of singles will now enjoy a little heavier lifting of the burden of government.
  • Woohoo for gay people.
  • Boohoo for freedom.
Been a while since I've posted. I have been very busy working two jobs. One with a celebrity who I am contractually obligated not to mention at this time. In the future.

Monday, June 6, 2011

Public Schools are Unconstitutional

Recently, a judge in Texas ruled that there could be no prayer or mention of religious words at the Medina Valley Graduation. The idiocy is profound:
Among the words and phrases banned by Judge Biery are “amen,” “prayer,” “join in prayer,”  “bow your heads,” or "in [a deity's] name we pray." He also ordered that the words “benediction” and “invocation” be removed from the graduation program. “These terms shall be replaced with ‘opening remarks’ and ‘closing remarks’,” he decreed.
Now, unless you're a Roman Catholic, the words "benediction" and "invocation" are probably nothing more than big words you here at graduations and invoke no religious meaning for the majority of people.

However, I make no claim to whether or not this particular ruling was the right decision based on the facts of the case and constitutional precedent because either way, the judge would have been wrong. His current ruling infringes on the religious and speech freedom of believers and had he ruled the other way, he would have been infringing on the rights of the plaintiff.

The socialist nature of the American public school system is such that there is no balance that can be achieved to satisfy the natural rights of all parties. The friction that arises from everybody trying to impose their will on everybody else is constitutionally untenable. The only correct ruling would be to strike down ALL public schooling as unconstitutional. And it's not just the first amendment.

First Amendment violations - see above

Second Amendment violations - The constitution puts no age limit  on gun rights, yet all public schools are considered gun-free zones. This is the government limiting your gun rights.

Fourth Amendment violations - Everyday across America, students lockers, bags, and persons are searched without a warrant.

Fifth, Sixth and Seventh Amendment violations - Everyday students are accused of a crime, denied representation, denied due process, denied a trial by a jury of peers, and sentenced without appeal all by a single person called "Principal."

Eighth Amendment violations - Students are frequently the given the maximum sentence of "expulsion" for minor violations.

Obviously, most of the above is said in satire. My child currently goes to a private school and the "principal" makes the decisions. I'd laugh her out of the school if she suggest my child be represented by peers or that a fellow student is packing heat. But my son's school is private. The constitution does not hold for this school.

The problem with public schools is that these policies are carried out by agents of the state; a state bound by the constitution. They do not have the same freedom that individuals have and do not get to make decisions in the same way. For our freedoms to be protected the state has to be bound. Public schools undo that binding and blur the distinction between us and the state. Yes, the principal is your neighbor and you trust him but that doesn't give him more authority than the constitution allows.

A lot of people talk about "choice." Education vouchers and tax credits are all the rage lately but, ultimately, it leads down the same road: state control of education. We're getting a lot of talk in Texas about private school choice but nobody is talking about disbanding the Texas Education Agency. Nobody is talking about me letting me choose the best teachers, regardless of licensing, and best curriculum for my son. That will all still be dictated by the state.

It's time to recognize our right to the Separation of School and State.

Also, a fantastic analogy from Don Boudreaux illustrating the absurdity of vouchers and tax credits.

The "One of Us" Myth

I listen to talk radio, in Texas, so a lot of hot air is exhausted over the potential Republican party nominee for the presidential run. A recurring theme is that this person must be "one of us."

First off, I'm insulted that they keep including me in this "us." I guess it's a twist on the Rene Descartes phrase: "I listen, therefore I am." You don't know me. That's as bad as saying that government is just a word for things we do together. Like this or this or this. Don't include me in those atrocities or your groupthink.

Second, there are over 160 million registered voters and I guarantee you that not two of those people think the same about everything. Even if you come to the same conclusions on some issues, you probably got their differently.

Third, according to a study, a lot of politicians share personality traits with psychopaths.
Kouri, who's a vice president of the National Assn. of Chiefs of Police, has assembled traits such as superficial charm, an exaggerated sense of self-worth, glibness, lying, lack of remorse and manipulation of others.
All those traits that make a good serial killer also make a good politician. That's why, even though you have good ideas, you're not running.

So, if you are looking for somebody like you, you will be sadly disappointed. But if we can't rely on the "like us" test, who will we vote for?

There are only two criteria for a politician of any kind:
  1. Are they THEMSELVES. Because, you know, if you try to be everything to everybody, you are   nothing to anyone. And probably a serial killer.
  2. Do they're ideas regarding policy match your ideas of good policy.
Regarding the first criteria:
  • If they begin to sound different as they gain more national prominence, they are not themselves. You see this all the time. Early on, usually before or at the beginning of a primary run, candidates say things that appeal to the Democratic or Republican base. Then as they get closer to the general election, their answers get muddier; they begin walking back certain statements. NOT a good sign.
  • Make sure they answer the question. A new study shows that you are not listening to their answer. "Researchers believe this could be because our brainpower is usually focused on interpreting the speaker's social actions — whether they think the person is honest or trustworthy — which distracts them from recognizing the dodge. (emphasis added)" Basically, you're hearing what you want to hear because the person has a nice smile or nice hair.
On the second point:
  • What are their means to an end? Like me, a lot of people think drugs are bad. I, however do not believe locking them up and throwing away the key makes their life better. I don't think that would have made George W. Bush or Barack Obama better off, do you?
  • Religion doesn't matter. They could be Christian, Mormon, Muslim, Scientologist, or Jedi. If they believe that torture is okay in certain circumstance, empire building for national security is cool, or that I HAVE to buy health insurance at gunpoint, they are not a good candidate.
So, don't go looking for somebody like you. There is nobody like you. If you think only someone like you can fix the problems, then you'll have to run yourself.

Saturday, June 4, 2011

A Solution to the Minimum Wage Problem

Economist Walter Williams discusses, with John Stossel, the effects of minimum wage laws on the very low skilled, especially blacks:

Essentially, blacks get trapped in a cycle of poverty because they're not initially worth enough to be paid minimum wage and without work they can't learn the skills. The obvious result is high unemployment among blacks.

In theory, a lot of Americans support the minimum wage. Of course, in practice even the most ardent liberal supporters don't support it in practice.

Although pointing out hypocrisy is fun, the point here is that the minimum wage isn't absolute. It only applies to hourly work. This is a good thing. It means we can employ low skilled workers and teach them the skills they need to move up the ladder.

So the solution? Contract work.

For example, instead of paying a kid $7.25 an hour to stock your grocery store, pay him $25/job or even $.10/box.

If you need help in a barber shop, $.000001/hair swept, or something like that.

This may even be better because not only are they learning skills and earning experience they're learning about entrepreneurship and self-employment. They may even stretch the limits of their creativity coming up with new ways to get paid.

Of course, knowing the quality of the public schools most of these kids are imprisoned in, I'm not sure how they will learn about this idea. But fatalism doesn't help. It's time to get creative in fighting back against the good intentions of bad policies.

Friday, June 3, 2011

That Creepy Morning Pledge

Hilarious video from the Whitest Kids U' Know:
From an intellectual standpoint, the idea of forcing kids to recite the socialist pledge is very creepy and anathema to a free society but having witnessed this ritual firsthand I'd have to say the effects are either a wash or negative.

It shouldn't be forced, especially before the kids can even understand the words. But it's hard to get people to care about this tiny fraction of the day when they don't even care about our  entire Soviet Style Education System.

Tuesday, May 31, 2011

Pasadena's New Bearcat G3 is Overkill

Here is my letter to the editor concerning Pasadena, TX's requisition of this vehicle.
To the Editor,

Looking at the Pasadena City Council photo op with the new Bearcat G3, I was both disappointed and dismayed. There is no legitimate domestic police function for this vehicle. 

Unfortunately, this type of vehicle is commonly used in SWAT raids to serve drug warrants. A tactic that inserts volatility into an otherwise peaceful police activity. Most recently a 26 year old combat veteran, Jose Guerena, after having survived two tours in Iraq, was shot dead, in his own home, by 60 bullets at close range during such a SWAT raid. 

They found no drugs.

The only thing the Bearcat G3 is good for is waging war. And judging by the smiles on the city council's faces, they feel comfortable with doing just that on their own citizens.

Brandon Leger



The next big thing making it's way around the internet is a tumbler site called Literally Unbelievable. It records people's real reactions to fake news stories off of The Onion. It's quite hilarious but there was one story in particular that kept popping up. It's this one:

Now forget the obvious PR nightmare that Planned Parenthood would have known a hypothetical "Aportionplex" would cause, the real clencher here is the dollar figure. $8 BILLION. With a "B."

It seems that the gigantic numbers thrown around in Washington have caused people to lose perspective on what things actually cost. We have become literally numb to the cost of spending, especially in the billions. And even trillions no longer elicit the same outcry. Pretty soon we'll be shrugging at a quadrillion.

Tuesday, May 24, 2011

Prohibition Claims Another Victim

This time it's the prohibition on "underage drinking." That is, the prohibition on imbibing alcoholic beverages under the arbitrary age limit of 21.

The news story recounts John Powell accepting a $5 bet to be punched in the face by Tiffany Startz. Her punch killed him. Or, that's the official story. Technically, the punch only "ruptured an artery in Powell's neck, causing blood to pool around his brain." Here's what really killed him:
Guy said Crest Hill police found that no one called 911 until after partygoers had settled on a story and gave the underage drinkers time to leave.

"They weren't concerned about my son lying there," she said.
The story doesn't mention how long the partygoers waited to call 911 but according to WebMD "[brain hemorrhaging] is a life-threatening condition, and you should call 911 or go to an emergency room immediately." (emphasis added) Unfortunately, under current law, had these people called 911 immediately the headline probably would have read something like:

Underage Drinkers and Partygoers Arrested After 911 Call                                                                                   Man lives after accepting bet to be punched in face
At the very least we need immunity laws for calling 911. It's unacceptable for people to die because they're afraid to call police for help.

Special Thanks to WebMD. Always there to vex my hypochondria.

Monday, May 23, 2011

Disney: IP Troll

Two days after an elite group of the US military, known as Seal Team Six, killed Osama bin Laden, Disney filed three separate applications to trademark the name:
In a perfect example of a big media company looking to capitalize on current events, The Walt Disney Company has trademarked “Seal Team 6"... Disney’s trademark applications for “Seal Team 6″ cover clothing, footwear, headwear, toys, games and “entertainment and education services,” among other things.
First, before I get to the point, I disagree with the term "capitalize" in the block quote above. This is no more an example of capitalism than our public schools.

As I pointed out in a previous post, IP Trolls are persons or companies who buy up or file for exclusive rights in order to receive a government grant of monopoly privileges to lock out competition and sue the bejeezus out of anyone who tries to compete. Disney is clearly being an IP Troll. They have no reasonable claim to the term "Seal Team Six," nor any projects previously in the works that could justify such a claim. They learned about this team they way everybody else in America did, on the news.

The Navy has taken notice and filed their own applications, though their a little slower on the uptake. Will this be the end of Disney's money grab? Probably not, says William McGeveran, a law professor at the University of Minnesota:
Disney may get approval, but what’s more likely to happen... is that Disney and the Navy will reach some kind of mutually beneficial agreement. Law enforcement agencies, such as the New York City Police Department, make such arrangements, lending out their trademark or cars, in exchange for compensation or script approval.... He could imagine that Disney might want to make a movie or TV show based on SEAL Team 6 and would strike some kind of deal with the Navy.
This is not an unusual practice. Large corporations that own a lot of copyrights have been known to sue each other and then work out an agreement to where they can both have access to each others copyrights, reducing competition even further.

Also, in the celebratory spirit of the aftermath of bin Laden's death, merchandise galore popped up with the term on them. Now, there is a possibility that these people could be sued in the future.

Welcome to America. Land of the free. If you have really good lawyers. (I exaggerate, but only slightly)


Just Say "No"

A disgusting abuse of authority in Tennessee. Cops, under the guise of enforcing drug laws, are stopping innocent people and stealing their money without probable cause. The officers search the vehicles then take the money and leave without ever charging the driver with a crime. It's made legal by asset forfeiture laws. All cops have to say is that they think that their may be a possibility that probably your money could have been somehow connected to drugs, then the money is theirs. Take a look.
But, notice something in every one of those encounters? The cops always ask if they can search. That is the only right you retain. Because the officers have no probable cause, the only way they can search your vehicle is if you let them. So if they ask, just say, "No."

A great website about this is Flex Your Rights. The Supreme Court has repeatedly lowered the bar on police integrity. Over and over again, they have said if you do not assert your rights, you lose them. Here is how Flex Your Rights would have you handle this type of police encounter:
If police detain and frisk you, you have the right to clearly state your refusal to consent to the search. For example, you may say "Officer, I'm not resisting. I do not consent to this search." But you should only verbally refuse. Never physically resist. Just touching an officer could get you tasered or beaten. You could also get a felony charge for assaulting a police officer. 
Whether or not they frisk you, an officer may ask you a series of questions, which may include something like "You don't mind if I have a look in your car?" While this might sound like a command, it's usually a request -- and the 4th Amendment protects your right to refuse search requests...
In response to such request, you may politely decline by saying "Officer, I know you're just doing your job, but I don't consent to searches." Some officers may use their authority to make you feel obligated to prove your innocence by asking "What do you have to hide?" Don't fall for such tricks. If necessary, repeat your refusal.
DO NOT make the mistake of letting them search your car. You may not know what is in there. Once, after getting my car washed, I found a vial of what looked like K2, which had recently been banned by the FDA. Even if it was legal, it was a suspicious looking herb in an unmarked, glass container. Definitely cause enough for a police officer to arrest and detain me.

And it's not just Tennessee or just money that's taken. Texas received an asset forfeiture grade of D-, the same as Tennessee. According to the Institute for Justice, Texas' asset forfeiture laws are written in such a way as to make "property owners bear the burden for innocent owner claims, making owners, in effect, guilty until proven innocent." And, here in Houston, they're stealing cars.

So, assert your rights and just say, "No."

Thursday, May 19, 2011

Before You Thank a Police Officer...

Ask if he supports the war on drugs...
the costs?
Or is he in denial?
Is he a hypocrite?

Ask if he believes a crime is a crime, even for colleagues...
that kidnap and rape?
that lie under oath?
that murder?
that steal?
Or will he remain silent?
Will he tell himself that he's just doing his job?

Will he silence the First Amendment?
Will he holster the Second Amendment?
Will he trespass the Fourth Amendment?
Will he deceive the Fifth Amendment?
Will he slow the Sixth Amendment?
Will he double tap the Seventh Amendment?
Will he torment the Eighth Amendment?

Ask him if he believes that he's above the law...

And if he answers, "No,"
Then... shake his hand.

This poem is dedicated to all the police officers who take their roles as public servants and defenders of individual liberty seriously. Those whose oath to protect and defend the Constitution means they'll fight against others that seek to do harm to it. Who understand the meaning of natural rights and Constitutionally protected rights. Officers who aren't afraid to break through the blue wall of silence. Those that can go to sleep at night without having to tell themselves that they're "just doing their job." Thank you for your service.

Two such organizations that I know of are LEAP and the Oath Keepers. If you know of more, please post so that they can get the credit they deserve.

This poem is a response to this story coming out during National Police Officer Appreciation Week. Jose Guerena, age 26, survived two tours in Iraq only to be killed by a local SWAT team during a drug sweep. They found no drugs on his property. Jose is another innocent victim in the drug war.

Monday, May 16, 2011

Get Your Hands Off My Brain!

The producers of The Expendables, represented by the US Copyright Group (USCG), has had a subpoena request approved by a federal judge. This request is being sent to find out the identities of over 23,000 bittorrent users who downloaded this crappy movie. (FYI, I've never seen the movie but if 23,000 people didn't feel your movie was worth waiting and coughing up a buck at the redbox, your movie sucks.)

The most egregious part is each offense is punishable by up to $150,000 fine, per download. That seems way out of whack with any sense of "justice" when a theater ticket costs at most $20. And then, to top that off, the USCG isn't even seeking justice; they want to settle at about $3000/download. Their coyright trolls, not intellectual property defenders.

Cases like this and this, where copyright trolls buy up rights just to sue, should have the US rethinking it's entire process for intellectual property. The whole purpose of property rights is to divide up scarce resources. Then supply and demand market forces price that property based on it's relative scarcity. Ideas are not scarce. The internet revolution has properly priced idea-based creations down to $0.

"But, what about making money off of your ideas?" Well, if your idea is good, it will make money. The problem for the producers in this case is that after downloading the movie and watching it most decided, rightfully so, that it wasn't worth buying. Hence, good ideas are scarce and have a monetary value. Bad ideas get downloaded and trashed. Unfortunately, we're stuck with these laws that go against the grain of reality.

But if we're going to have intellectual property laws, two rules:
  1. Punishment fits the crime - $150,000/download is outrageous.
  2. Ban copyright trolls - The only person benefiting from lawsuit should be the "victim." Companies that buy up copyrights for the sole purpose of suing, should have no place in our legal system. It is a distortion of justice.
If you do find yourself up against copyright trolls, contact the Electronic Frontier Foundation.

A More "Humane" Medicare Solution

In a post about Newt Gingrich's attack on Paul Ryan's Medicare plan, Andrew Sullivan concludes with this:

I fervently believe we need to cut entitlement spending, but asking, say, an 80 year old to figure out which insurance plan she wants with her voucher does not seem practicable or humane to me...I guess Ryan helped me look into the abyss of simply cutting grandma off when her voucher reaches its limit, and I want a more humane, moderate and measured way to cut costs.

This is, of course, very demeaning. The inference here is that at 80 years young, grandma and grandpa are the picture of senility. If this were true than I doubt they could even get themselves to the doctor, unless they have family to take care of them. And if they have that, Medicare is moot.

But, beyond that, I believe the more "humane" solution would be treating people as humans and letting them make their own choice instead of treating us like mindless cattle. Starting right now, let all citizens including current Medicare recipients choose between current Medicare, a voucher system, or opt out all together.

Better yet, let everybody opt out of all entitlements and live our life out from under the thumb of government. That seems the most humane to me.

Friday, May 13, 2011

Why Libertarians are Right and Communists are Wrong about Natural Rights

Interesting bit of philosophizing by Gene Callahan over at the Crash Landing blog. Basically, the argument is that everybody views natural rights differently. Libertarians see property rights as natural rights whereas communists reject that notion, so either way one of us would have to impose our views onto the other through force. Two reasons why libertarians have this right.

  1. Economies based on property rights flourish because they don't run against the grain of human nature and...
  2. If you went into a communist's house and tried to "share" his stuff, he'd be the first to throw you out. Once again, that's just human nature.
Of course, in an ideal world, all of us could just pick up and leave, setting out to create and find political systems that work for us and other like minded people. Us libertarians could have our property rights and communists can live together just stealing from each other.

What Romney Should Have Said...

"My healthcare plan, commonly referred to as Romneycare, was a state solution to a federal problem. For decades now, states have been forced into a mandated regulatory framework that has put on them undue burden and has been the major contributor to soaring costs. "

"As a governor, I could not change federal law, only state law. So within that context, I set out to create the most market driven healthcare solution I could think of, with statutory language that would roughly mimic what you would have in a perfectly competitive marketplace. It was not the perfect solution but we thought it would alleviate some of the pressure on our citizens from the federal mandates. We were wrong. I was wrong."

"It is true that the number of uninsured have gone down but by every other metric Romneycare has been a failure. Longer wait times, more emergency room use, costs rising higher than even in the rest of the nation. That's why we should begin to do what I originally wanted to do and begin repealing federal healthcare laws and mandates."

"Start by repealing Obamacare and Medicare Part D, mistakes from both parties. Then begin working our way through old laws, worn out laws. Open up the market. Insurance across not only state lines but international boundaries. A world market for pharmaceuticals. Any and all ideas on the table to unleash the competitive forces of capitalism. Sorry, Massachusetts, about my plan. Now we know this problen can't be solved by states while the federal government is strangling them. Thank you."

Of course, he would have been completely BSing but at least it would make sense.

Wednesday, May 11, 2011

Debunking THE Health Care Graphic

Medical Billing and Coding, an organization that teaches... well, exactly what you'd think it teaches, has entered into the fray over the fight to explain why Americans pay so much more for health care than people in other countries. They have even provided a fancy, easy-to-understand graphic to illustrate "myths" and "truths" about health care costs. You should really go look at it. It's an impressive piece of propaganda.

Oh, yes, I said propaganda because, although their numbers may be factually true, their delivery and conclusion are disingenuous, to say the least. The graphic claims to explain "why" but it doesn't. All it shows is that we spend more, which we already knew. Saying we spend more on health care because we spend more may be true but doesn't answer ther question they say they're answering. The graphic leaves you with a sense that you're being bilked. So, I went and read through the Incidental Economist posts by Aaron Carroll that were cited as sources, plus the ones that weren't, and Mr.Carroll has a different reason:
So here’s our first bit of depressing news.  The single biggest contributor to the money we’re spending that’s “extra” is for medical care.  It’s not a company or a crook.  It’s for actual stuff that we seem to value.
It's not private insurers, greedy CEO's, or even incompetent government bureaucrats; it's stuff. We buy a lot of health care stuff. We have an insatiable demand for health care. Unfortunately, there is a very limited supply. Low Supply + High Demand = High Costs

Then they come to their conclusion. After citing studies and posts that show empirical data of the drivers of our expensive health care costs they cite this. A survey that just so happens to reaffirm Medical Billing and Coding's work as the answer to healthcare. All we need is more transparency. That's it. Sounds like a good way for Medical Billing and Coding to get a nice, big, fat subsidy from the government to do the work they're already doing.

Here is how that would work out in real life:
Woman - "Doctor, how much is this runny nose medicine going to cost?"
Doctor - "Well, let's see.... We have this new tranparency initiative subsidized by the federal government. Let me ask my federally subsidized transparency agent trained at a federally subsidized Medical Billing and Coding College. Hold on. Yes, yes, mmmhmmm, ok, thanks! Exactly $5768.23."
Woman - "Is my insurance paying for it?"
Doctor - "Yes!"
Woman - "I'll take it!"
Now that we know transparency isn't the issue, what is?

Carroll's posts focus on the excess we spend over and above what you would expect us spending based on wealth trends in comparison to other countries. But how do we define excessive? Stan Liebowitz, in a policy paper titled "Why Healthcare Costs So Much," helps:
The economic concept of excess use of medical resources is illustrated in Figure 2, which is a version of a simple [demand curve] diagram that can be found in virtually any introductory economics textbook...

That can be understood by examining the implications of other quantities of medical service. For quantities of medical service greater than Q*, a unit of additional medical service is of lower value to patients than is the cost of providing it. In other words, patients would prefer cash equal to the value of the resources used to provide the medical services to receiving the medical services. Thus, it impoverishes patients and society to produce medical services when the recipient of the service would prefer those resources to be used for a different purpose.
So we're paying for medical care that we otherwise wouldn't pay for. Why?
Unfortunately, the current medical system does not induce patients to choose the efficient quantity Q*. Because patients largely have their medical bills paid by third parties, it is rational for them to consume medical services even when the value of those medical services is less than the value of the resources used to provide them. (emphasis added)
We demand more because we don't pay for most of what we get, somebody else does. Here's an analogy of how this has affected or health care system:
If the government told citizens that it would pay 80 percent of the cost of each automobile purchased, most citizens would march right out to their local dealerships and order very expensive cars. Automobile manufacturers, sensing profits in the air, would begin to offer far [less] standard equipment and would begin to offer more new types of equipment than they had previously. What was formerly a luxury car would become commonplace, and new, more luxurious automobiles would be produced. The newest technologies would be used (rather like those used in jet fighters), since the cost to the consumer would be only a fraction of the actual cost. Thus, the growth in automobile expenditures caused by the third-party payments could go on for many years.
Most people would recoil at treating health care like this. How dare I even suggest we use Ford Focus care when Lamborghini care is available. Lamborghinis are sweet but a Focus will get us where we need to go. So instead, we go to the primary care physician when an aspirin would suffice; the gastroentorologist when pepto-bismol could have taken care of it.

Unfortunately, their really is no easy political answer. Americans love our "Third Way" health care system. It provides us with Lamborghinis that we couldn't buy on our own. We have come accustomed to it. But their is only two ways to bring down costs; markets or rationing. European nations chose their path long ago and, now, we're in situation where we have to choose ours.

Tuesday, May 10, 2011

Hugh Hewitt Lost in Fantasyland

Apparently, Hugh Hewitt doesn't like debate:
This is why the GOP needs to rethink its debate schedule and why the RNC should take over the operation of the debates and exile Cain, Johnson and Paul as well as every other candidate without a prayer of winning. (Santorum is a long shot, but he has a realistic though small chance of winning the nomination, while the others do not.) The seriousness of the fiscal crisis requires the GOP and its candidates to act seriously, and allowing marginal candidates to eat up time and distract from the enormous problems facing the country is not serious.
Or debate means "eventually, you agree with me" because either Hewitt seriously underestimates Ron Paul's importance or he's being disingenuous and writes him off because of their disagreements. Yeah, it sucks when those guys won't even deign to pretend to think like you.

As for the candidates Hewitt wants gone, Paul and Johnson are the only two that I know of who have given more than platitudes towards solving the fiscal crisis. On this issue, and most issues, the rest are sloganeers. No details, no substance. Cain, though I disagree with him, fared well in the debate, maybe even coming out on top. I know he's not Mr.GovernmentRunHealtcare, Hewitt, but it would seem you can't just write him off.

Oh yeah, and Republicans don't even agree:
Gallup has always found political independents to be most desirous of a third party, and 68% currently are. But right now there is also a significant party gap, with 52% of Republicans favoring a third party, compared with 33% of Democrats. (emphasis added)
I would say Republicans are craving something different from the small(microscopic, actually) "c", top-down, big government loving, conservatives that Hewitt just absolutely, positively loves.

Monday, May 9, 2011

The Magic Lever to Cure Poverty

Over at Matthew Yglesias' blog he has a post titled Poor Economics. He is giving his thoughts about a book of the same name by author and economist Esther Duflo. He cites two passages. The first he found "convinving":
We also have no lever guaranteed to eradicate poverty, but once we accept that, time is on our side. Poverty has been with us for many thousands of years; if we have to wait another fifty or hundred years for the end of poverty, so be it. At least we can stop pretending that there is some solution at hand and instead join hands with millions of well-intentioned people across the world—elected officials and bureaucrats, teachers and NGO workers, academics and entrepreneurs—in the quest for the many ideas, big and small, that will eventually take us to that world where no one has to live on 99 cents per day. (emphasis in original notation)
 That does sound convincing. Everybody working together, taking small steps, eradicating poverty, no idea too small, giving each other warm, fuzzy hugs. That is, it makes sense until you read the next passage cited by Yglesias:
We have started including the question “What are your ambitions for your children?” in surveys given to poor people around the world. The results are striking. Everywhere we have asked, the most common dream of the poor is that their children become government workers. Among very poor households in Udaipur, for example, 34 percent of the parents would like to see their son become a government teacher and another 41 percent want him to have a nonteaching government job; 18 percent more want him to be a salaried employee in a private firm. For girls, 31 percent would like her to be a teacher, 31 percent would want her to have another kind of government job, and 19 percent want her to be a nurse. The poor don’t see becoming an entrepreneur as something to aspire to. (emphasis in original notation)
See the disconnect?

First, it's a big problem that parents want their kids to be a government worker. If the best way out of poverty is a government job, than the government is already so large that it is stifling the economy and causing poverty, since that one government job is financed by taxes on many impoverished families.

Second, all they want are jobs. All they need are jobs. So, it seems the best way to eradicate poverty is to give them jobs. Not wanting to be entrepreneurial is not necessarily a bad thing. Many Americans are risk-adverse and prefer a "stable" job to going it alone.

And that brings us to the magic lever, which Yglesias hints with "super low wage sweatshop work": "Outsourcing American Jobs".

Free trade, free markets, globalization. Poor countries liberalizing their economies and cutting government. Rich countries outsourcing low productivity jobs. Basically, what we have been doing for decades.

I know, I know. We're supposed to "save American jobs." Though I'm not entirely sure what an "American job" is. Arnold Kling, in a post about technological job displacement, writes that "occupations that were decimated by mechanization during the Great Depression: cotton picking, cigar rolling, glass blowing (of bottles and light bulbs). Would anybody want those jobs if they became available now?" The same can be said for outsourcing. Do you really want that job in the call center? What about those "manufacturing jobs" we here so much about? The ones where you are on your feet for 8-10 hours a day performing a mindless task over and over and over and over and over and over and over and... well, you get the point.

For those worried about Americans being unemployed, I'll remind you that the unemployment rate has only gone up because of the recession. In non-recessionary times, outsourcing has no discernible effect on unemployment.

I do understand the concern that markets don't work fast enough and that's legitimate. But I think the greater concern is pouring resources into things we know don't work, like foreign aid or governments and politicians that hamper markets and trade. We have lifted billions of people out of poverty over the last few decades, why stop now?

So What If All the Icecaps Melt?

I was sitting here watching the ice melt in my cup, remembering something from physics, and thought I'd push some buttons. The physical principle is this: the amount of water displaced by a mass is equal to the volume of the mass. In other words, it doesn't matter the form of the matter, it will take up the same amount of space.

Back to my cup. Most of us have had a nice, large cup of ice water outside on a hot day. Yet, we've never experienced an overflow when the ice melts. This is because of the principle stated above. And if the principle holds true for my cup of ice water than it should hold true for icecaps in the ocean, regardless of size.

I have thought of this occasionally but have never been able to find a satisfactory answer. Is there something special about icecaps that their melting would cause sea levels to rise? Is something different altogether at play?Links, please.

Saturday, May 7, 2011

Kay Bailey Hutchison: Hypocrite

Now, I don't mean to single out Kay Bailey Hutchison because she has plenty of company among her fellow republicans, but her new op-ed was the straw that broke the camels back. It just drives me crazy to hear most of these people bloviate about fiscal responsibility when their votes don't match the rhetoric. Here's some examples for Hutchison:

  1. Voted YEA on Medicare Part D, the largest new entitlement since the passage of Medicare and before Obamacare. And it was unfunded to the tune of $7.2 trillion.
  2. Hutchison herself has voted 9 times to raise the debt limit. Her only NO votes have been when Democrats have controlled the Senate.
  3. She VOTED FOR THE FULL-YEAR CONTINUING APPROPRIATIONS BILL. Remember? This is the one that cut $38 billion. No, wait, $352 million and it approved $1.6 trillion in deficit spending.
Now, she's telling us that we have to be fiscally responsible. That we can't vote for the debt limit increase unless there are "meaningful spending reforms."

But she voted for deficit spending. Now she's turning around and trying to say the debt limit can't be raised. She's trying to have her cake and eat it too.

I'll be glad when she's gone.

Confirmed: Stimulus was payoff. Duh!

The NEA's political action committee have endorsed President Barack Obama. (Do click the link, the title says it all.) This is not only before their is a Republican candidate but before there is even a full Republican primary field. The PAC usually makes their endorsement during the annual meeting in the year of the actual election. The next meeting is in July 2012. I wonder is their is a reason for this unprecedented move:
The stimulus package passed early in the president’s tenure sent $150 billion in new federal spending to school districts and universities. Then when that funding dried up in the summer of 2010, the White House and congressional Democrats moved to fill in the gap, approving $10 billion to prevent teacher layoffs as part of a $26 billion package in state aid...“The stimulus saved a ton of their members' jobs and the extension of state money last year has kept a ton of their members in the states employed," the [Democratic] operative said.
Oh yeah...

Friday, May 6, 2011

You're Watching: Double Dip Housing Market! Up Next: Double Dip Economy

David Indiviglio reports that Clear Capitol, a housing industry consulting firm, has offically announced a double dip recession in the housing market.
National home prices are officially on the hunt for a new bottom... It reports that national home prices now sit 0.7% below their March 2009 low. Over the past nine months, they're down 11.5%.
And here's the graph:

Mr. Indiviglio (what a cool name) reminds us that:'s important to remember that it's a self-imposed double dip. The home buyer credit essentially prolonged the housing market's agony. Instead of allowing the market to hit its inevitable bottom, the program propped up home buyer demand for a period of time. But once that support was withdrawn, the market continued back down its inevitable path. (emphasis added)
Notice the implication for our economy? The stimulus and bailouts may have stalled the economy's downward spiral but it didn't stop it. Once the money starts drying up the economy will begin it's downward path again.

Herman Cain's Energy Insecurity

Herman Cain highlighted last night one of the more infuriating misconceptions during this presidential race. If you watched the group survey after the debate you heard a lot of "Herman Cain is a business man and we need a business man in the White House." But knowing business does not necessarily translate into knowing economics. Knowing management and marketing strategies is not the same as knowing good macroeconomic policy.

This was especially apparent when Cain brought out the tired old trope of energy independence. Every President since Nixon has promised this, yet we have decided to import more oil, not less. There are a lot of bad reasons to try and achieve energy independence. You can here from Robert Bryce on the subject here or here.

But there is another reason that is underscored by our current problems with sugar. According to the Wall Street Journal in "Sugar Squeeze in US":

A potential drop in home-grown sugar coupled with government caps on imports of the sweetener could drive up prices, just before the peak Christmas season.
A harsh winter has caused headaches for U.S. sugar-cane and sugar-beet farmers. Record cold last December damaged sugar cane in Florida, taking about 260,000 short tons of raw sugar out of production, according to the U.S. Department of Agriculture

The US has a horrible protectionist system for sugar, what you may call "Sweet Tooth Independence," which has not only resulted in us paying higher prices for sugar and sugar byproducts as well as having the unintended consequence of the creation and upsurge in use of high fructose corn syrup, it has made us less "Sweet Tooth Secure."

If our energy policy looked like our sugar policy then a large scale disaster or attack on our domestic supplies coupled with the legal inability to trade in energy could put us in quite the energy bind. Plummeting supplies would bring about skyrocketing prices without imports to offset the reduction. We're better off with a highly decentralized supply of energy where we produce some and import the rest from (in order) Canada, Mexico, Saudi Arabia, Venezuela, Nigeria, Angola, Iraq, Algeria, United Kingdom, and Brazil. (That's just the top 10. You can't attack them all at once and I'm pretty sure nobody wants to attack Canada anyway.)

So before you vote for somebody because their a "businessman," listen to what their saying.

Amerinese Water Torture and the Cognitive Dissonance of Spreading Democracy

The death of Osama bin Laden and the Republican primary debate last night have reignited the debate on waterboarding. When asked to raise their hands if they supported the resumption of waterboarding under any circumstance they can think of Tim Pawlenty, Hermann Cain, and Rick Santorum aired out their armpits. (It gets hot under those lights.) Ron Paul and Gary Johnson refused to join the stink fest.

Of course, it was never called torture. It was referred to as "enhanced interrogation." Though, as any 8 year old boy knows, euphemisms are only used when we know we're doing something we're not supposed to be doing. "No sir, I don't know how he got that bloody lip and black eye. We were just 'playing'." This is akin to saying, "Oh that chinese water thing. That's just some drops on the forehead."

When the Japanese and German military performed this "enhanced interrogation" technique during WWII we cried foul. And rightly so. But when we do it, we turn a blind eye.

The crux of the matter is the cognitive dissonance we have when it comes to our team doing the dirty deeds. Last September Bryan Caplan, who blogs at EconLog, asked, "When Are We the Bad Guys?"
"OK, what would we have to do to be the bad guys?"  And my claim is that group-serving bias makes us quick to clear us and condemn them. (emphasis in original)
Last night, Tim Pawlenty said, "There is a group of radical jihadists, and we need to call them by name. And they believe it is okay to kill innocent people in the name of their religion." He's right. It's not okay to kill innocent people for your cause. And Al Qaeda killed 3,000 people on 9/11. And through other attacks have killed more.

But we have gone around the world and, at current count, according to the Iraq Body Count Project, have killed somewhere between 98,170 — 107,152 innocent people in the name of our form of democracy. That's more than 30 times the amount Al Qaeda have killed, yet we still see ourselves as righteous.

Even now, I experience this cognitive dissonance and group serving bias. Thinking of 9/11 makes me feel wronged, personally. As if the attacks were carried out on my family. I don't feel the same way when I think of those others killed. Even though logically I know I should feel 30 times as worse, that was them. 9/11 was us.

Thursday, May 5, 2011

The Irrational Voter

Rasmussen reports that those who the number of those who favor repeal of Obamacare is at an all time low. The new poll shows that only 47% of likely voters favor repeal while 42% oppose repeal. (Apparently, 1% of people live under a rock and couldn't be reached.)

Perusing the poll data, I can see that the highest "favor repeal" has been was 63%, back in May of 2010. Now, giving the benefit of the doubt and adjusting these numbers up or down in accordance with the 3% +/- error rate we have 50% low and 60% high. This is a 10% difference.

Using the 2008 voter data, 64.9% of 225.5 million people voted. That comes out to approximately 146.35 million voters. Using the adjusted 10% difference we come out to a likely 14.6 million people who are crazy-eyed, wishy washy, froot loops who don't know which way is up or down.

But, again, this is just a guess.

Love the Joe Pags show, but he's wrong again

I was going to recommend "8 Murders a Day" but now I'm not so sure. Joe Pags had director Charlie Minn on his show to talk about the extreme violence in Juarez, specifically, and Mexico over the past four years. He places blame at the feet of the drug cartels but unfortunately, overlooks the effects of the entire drug war. Instead, after bemoaning the tragedy of "eight people in the street every night" his advice is to "close down the border".

That kind of misses the point.

The violence in Mexico is a direct result of our government's war on drugs. It is the black market for drugs that brings in the criminal entrepreneur. And since they are in an extralegal environment, disputes are settled with guns. The obvious solution would be to legalize and regulate drugs in the same way we do for alcohol and tobacco.

Here's their response to that. And I'm paraphrasing because this is from memory.

Joe Pags: "And [Vincent Fox] wants to legalize all drugs, do you want that?"
Charlie Mann: "No, I don't want that. I don't want to see a 12 year old on the street corner strung out."

Of course, this is a ridiculous argument because if it were true we'd see 12 year old kids stumbling around drunk. But it's not legal for them to drink alcohol and besides alcohol is in a much more controlled environment. Not impossible to get but harder.

Unfortunately, a lot of people still cling to their irrational fear of (illegal) drugs. (For some reason we tolerate "legal" drugs like tobacco and alcohol because, I don't know, I guess we've gotten used to them?) So until people like Joe Pags and Charlie Mann can come to grips with reality on this issue there will be 8 people dying every day for a nonviolent, consensual "crime."

Wednesday, May 4, 2011

Why 10 year olds don't vote...

Over heard a 10 year old kid in a class I was subbing for say, "If I was President, nobody would have to pay for bills or anything. Everything would be free."

Unfortunately, there are people of voting age who believe that.

Tuesday, May 3, 2011

Polishing Ron Paul's 10% Solution

Ron Paul has been out lately promoting a 10% solution. Basically, what this means is that you are given the option of "opting out of the system" and in return you pay a flat 10% of your income.

Now, some people, like MSNBC's Ed Shultz, have derided Paul because their small minds can't comprehend what Paul my actually mean. Though, to be fair, I'm not sure Ron Paul is sure what he means. He admitted it was a rhetorical question, I think more in the vein of a thought experiment than actual workable policy. So, let's clean it up.

First, specify that it is an option to opt out of the welfare/entitlement system. This means no direct subsidies to that person. They would still have access to public roads, Mr. Schultz, because that's paid for through the gas tax. CIA, FBI, FDA, military would still apply to this person because they are still paying taxes.

Second, we have to untangle these entitlements out of this person's life. Entitlement taxes are no longer withheld and all employer tax contributions are now captured by the employer, immediately raising their income.

Third, the taxpayer has the option of opting out of their employer's health insurance package and capturing that value for their income. This is because these benefits only exist because of federal tax policy.

The combined effect of two and three would dramatically raise income. In my own personal experience, the combined loss to income from federal withholdings and taxpayer subsidized employer health insurance was just shy of 30%. A giant bite.

Fourth, the 10% tax bill would come with no deduction. No business deductions, charitable deductions, home mortgage interest deduction, etc.. Reducing a tax bill to zero would exacerbate the debt problem, so you would have to pay.

Fifth, we would need a comprehensive immigrant work visa program to make up for any revenue shortfall, especially in the short term with baby boomers retiring. Unlimited work visas with the "opt out" option already attached. Immigrants would work, pay 10%, and receive nothing.

There is probably a lot of stuff I'm missing but I think this would be a good start. It's definitely something I would do.

Hey! You Oxymoron!

Over at the Crash Landing blog, Gene Callahan quotes F.A. Hayek musing on the limits of human knowledge to consciously design civilization and concluding that civilization has "grown from the free efforts of millions of individuals."

Then Callahan says:
This is a very good point. Libertarians might consider that it applies every bit as much on the attempt to force free trade or unregulated labor markets on society as it does to force collectivized agriculture on society. (italics added)
I'm not sure how you force free trade since free trade would be the natural state. Limits on those freedoms would be the result of force.

Now, Callahan makes a good point about guilds which can be the product of free people freely associating. Unfortunately, the lesson of history has been that those same guilds would use their clout to lobby their governments to restrict others freedoms. Today we call them special interests; steel, sugar, corn, oil, etc..

I've no problem with free people freely exercising their right to freedom of association to freely practice their freedom of speech. Just don't inhibit my freedom to freely trade.

That's a mouthful of freedom.

Monday, May 2, 2011

bin Laden: Dead but Not Gone

Radley Balko has verbalized what I was feeling this morning.
Yes, bin Laden the man is dead. But he achieved all he set out to achieve, and a hell of a lot more. He forever changed who we are as a country, and for the worse. Mostly because we let him. That isn’t something a special ops team can fix.
There are a lot of bullet points that detail the way America has been changed for the worse, such as the TSA and unilateral executions. Read the whole thing here.

This is why I didn't find myself overly exuberant and joining in the White House party.

Why Public Monopolies Stink - Part 84332876

My tap water tastes like wet dog.

Tax money wasted.

Have to use more money to buy water at grocery store. Thanks Stinkadena.

The Man Behind the P90X Curtain is...

Carl Daikeler.

Who, you ask? Well, with about 7 minutes left in the Chest/Back routine on P90X Tony Horton says, "By the way, [Carl Daikeler] is the CEO of this fine company. And he's allowing us to do this to give to you. It's a gorgeous gift."

Everybody knows who Tony Horton is but without Carl Daikeler P90X might not exist.

And he's probably one of those evil rich CEO's I hear so much about...

Osama bin Laden DEAD

Osama bin Laden has been killed. Double-tapped.

Mission accomplished. Justice served.

Can we come home now?

Note: Picture not real

Sunday, May 1, 2011

Victims of Communism Day?

Ilya Somin makes the case that May Day should be changed to Victims of Communism Day. Communism has claimed somewhere between 80-100 million lives. The Holocaust, which we memorialize, claimed about 11 million.

I'm not sure about the date but I like the idea.

And bureaucrats are saints?

A heated web debate has erupted over Paul Krugman's lament that people who consume medical care are called consumers.

Krugman believes that the patient/doctor relationship is sacred and that "patients" can't know enough to "consume" medicine. Of course, this is true of everything in an age of specialization of trade. Although, as a frequent visit of, I can attest that the market has ways to mitigate this knowledge problem.

But here is the part that I found interesting.

"And that’s especially true when that blank-check approach is combined with a system that gives doctors and hospitals — who aren’t saints — a strong financial incentive to engage in excessive care.
Hence the advisory board..."

And the bureaucrats on the advisory board are saints?

Friday, April 29, 2011

Capitalism Brings Us Together - Fair Trade Edition

I gripped on a live stream of a Fair Trade event. The CEO talked with some of the people who are leaders in Fair Trade Co-Ops on the impact Fair Trade has had on their life.

The morality here is two fold.

First, I'll admit I've always been a little close minded about Fair Trade certification. Knowing that one of the requirements is that farmers have to be part of a cooperative always turned me off. A cooperative always seemed a little Marxist to me.

But here I am, at a Fair Trade event, something I would have never considered before. And there is only one reason. I'm getting paid. In other words, capitalism. Capitalism brought me face to face with people who I may have disagreed with in the abstract but who are good people nonetheless. That's the first point.

Also, I actually learned something by listening to these farmers (who incidentally hail from, right to left, Peru, Costa Rica, and Kenya; blue shirt is Mr.CEO). 
  1. A cooperative is more of a democratic community than a communist utopia. Yes, the profits are shared so that even the laziest farmer gets the same as the hardest working but it's voluntary. I think that is the main point. These farmers have decided that the trade-off makes them better off in the end. 
  2. They genuinely care about the quality of the product and the consumer liking it. This is important. They have teamed up with Fair Trade not for handouts but as a marketing tool. 
  3. Because of it's voluntary nature, Fair Trade certified products are a new form of capitalist driven charity. When you buy these products you are subsidizing these farmers lives over and above the market value of their productivity. This may be even better than traditional charity because the money flows through productive means.
  4. They are genuinely happy with this arrangement.
The second point and the most important point is that the Fair Trade certification organization is a byproduct of genuine capitalism, as all charity is. You can't have charity if everybody is poor. 

I am not entirely convinced about Fair Trade though, for a few reasons. 
  1. Fair Trade products have a price floor which means their price stays above a certain level even when market prices drop. The CEO compared it the having a minimum wage. And we know that the minimum wage is good for those who have it but basically prices workers out of the market causing higher unemployment. Which brings me to...
  2. What are the requirements for being in a co-op? It seems that those within the co-op benefit but what about those left out? Also...
  3. What if you don't want to be part of a co-op? What if you don't want to go to the general assembly every year and fight over who gets how much? Why can't you be an independent land owner who treats your workers "fairly" and still get the certification? Is that fair?
Anyway, had a good time and learned something new. All in the race for the almighty dollar! Thank you, capitalism.